Despite the rigorous studies on pancreatic development over the past two decades, key questions remains regarding how functional beta cells can be derived. It is clear that a group of pancreatic progenitors activate proendocrine gene Ngn3 and its targets to regulate beta-cell development. It is not clear when are the progenitors committed to beta-cell fate and how the number of beta cells is determined during embryogenesis. These questions are particularly relevant to human diabetes. Several studies have demonstrated that endocrine differentiation from human ES/iPS cells in vitro can only produce insulin-expressing cells that lack necessary glucose response, underscoring our inability to derive proper endocrine progenitor cells with the right competence for beta-cell production. Furthermore, intrautarine factors that can lower the number of endocrine progenitors during embryogenesis predispose human and model organisms to late onset diabetes, highlighting the significance of obtaining sufficient numbers of pancreatic beta-cell progenitors i development. We have been studying a feed-forward gene expression loop, between Myt1 and Ngn3, to examine the basic mechanisms governing beta-cell development and function. We found that GAP junctions and microRNAs can both positively regulate Ngn3 expression, both the number of Ngn3+ cells and the relatively level of Ngn3 within each cell. These findings suggest that GAP junction-mediated communications are essential to coordinate the behaviors of progenitors for en masse beta-cell production. By developing an innovative bipartite Cre-based cell fate mapping, we also found that beta-cell fates are determined when or before Ngn3 is turned on. This beta-cell fate choice is mediated, at least partly, through the interaction between Myt1 and Ngn3. As a result, Myt1+Ngn3+ progenitor cells preferably give rise to beta cells, whereas Myt1-Ngn3+ cells give rise to alpha cells. Furthermore, we found that epigenetic modifiers can modulate the expression of Myt1 and the fate of the Myt1+Ngn3+ progenitors, and that Myt1 interacts with known chromatin modifiers including histone deacetylase Sin3A. Here in this grant renewal, we propose to investigate how GAP junction-mediated signals in conjunction with microRNAs and other epigenetic modifiers to regulate beta-cell production. We will first test a novel hypothesis that microRNAs can pass through GAP junctions to coordinate cellular differentiation to endocrine fate. We will then examine how epigenetic modifiers modulate Myt1 expression and how Myt1 interacts with other chromatin modifiers, such as Sin3A, to direct beta-cell fate choice over other endocrine cell types. Routine cell purification and genetic manipulations will be utilized to accomplish these goals. We envision these mechanistic studies to provide instrumental details regarding earlier developmental events that could affect beta-cell function in later physiology. Translating these knowledge to human tissues can directly help with derivation of functional islets from human ES/iPS cells for usage in curing Type I diabetes and help with designing ways to enhance beta-cell function for Type II diabetes.